Bombay HC Allows GST Refund Because Section 54 Amendment Is Prospective

Babasaheb Kedar Shetkari Sahakari Soot Girni Limited Vs State of Maharashtra and others (Bombay High Court)

The Bombay High Court allowed the writ petition challenging the rejection of the petitioner’s GST refund applications for excess input tax relating to the period December 2017 to March 2018. The refund applications had been rejected on two grounds: first, that the application for December 2017 was filed beyond the time prescribed after the 2019 amendment to Section 54(1) of the GST Act, and second, that the applications for January to March 2018 could not be accepted because the refund application for the previous month was unavailable on the portal.

The petitioner contended that Rule 97-A of the GST Rules permitted manual filing and processing of refund applications where electronic filing was not possible. It also argued that the amendment to Section 54(1), which altered the definition of the “relevant date,” operated prospectively and could not apply to refund claims relating to periods prior to 01.02.2019. The State argued that the limitation had to be computed in accordance with the amended provision and that the refund application had not been filed within the due date for furnishing returns.

The High Court held that, in view of the Supreme Court’s order excluding the period from 15.03.2020 to 28.02.2022 for limitation purposes, the refund application filed on 13.05.2020 for December 2017 was within time. The Court further held that the amendment to Section 54(1) was prospective, as it did not expressly provide for retrospective operation. Consequently, refund claims relating to the period before 01.02.2019 were governed by the earlier definition of “relevant date,” namely, the end of the financial year, and not the amended definition based on the due date for furnishing returns.